Puerto Rico ‘Disappointed’ With S&P Junk Downgrade

By Michael Aneiro

Puerto Rico just released a statement responding to Standard & Poor’s, which today cut Puerto Rico’s credit rating to junk status, citing the commonwealth’s limited liquidity and uncertain access to capital markets. Here’s the statement from Puerto Rico’s treasury secretary and government development bank chairman, in its entirety:

“While we are disappointed with Standard & Poor’s decision, we remain committed to the implementation of our fiscal and economic development plans. We believe the investment community will recognize the positive impact of the reforms that the Garcia Padilla Administration has enacted in due course.

“We appreciate that S&P recognizes the Commonwealth’s significant efforts to date to tackle long-term structural issues, demonstrated by our significant pension reform, increasing the independence of a number of public corporations, and recent revenue increases. S&P also noted that the administration’s recently announced intention to reduce the current year deficit and plan for a balanced budget for Fiscal 2015, one year earlier than originally planned, will potentially lead to long run credit improvement.”

“We are confident that we have the liquidity on hand to satisfy all liquidity needs until the end of the fiscal year, including any cash needs resulting from today’s decision. In addition, the GDB and the Commonwealth of Puerto Rico have been in discussions with parties that have expressed an interest in arranging additional liquidity for the Commonwealth, and the Commonwealth continues to explore such options, including obtaining additional funding, as necessary.”

As the Commonwealth and the GDB continue their commitment to market transparency, the GDB, Treasury and OMB plan to hold a joint webcast on February 12, 2014 to discuss the immediate impact of the downgrade and the Commonwealth’s fiscal and economic plans and progress, and to update investors on its financing plans.

“We are proceeding with focus and determination to continue strengthening the Commonwealth’s financial position and build a solid foundation for economic prosperity and development.”